Yglesias theorizes that the obsession about government deficits among elite Americans is motivated more by a hate of our big entitlement programs, Social Security and Medicare, than by anything else. That is why elites have not changed their focus on deficits despite the rapid evaporation of the deficits. As he says:
What [elites] care about is reducing the federal government’s fiscal commitment to bolstering the living standards of elderly people. The Powers That Be hate Social Security and always will because it’s a program whose entire purpose is to pay people money not to work. That’s not a perverse consequence of Social Security. …That’s the point. It’s to give people money so they can retire with dignity. “Retire” being a fancy word for “not working.” You’re never ever going to persuade business leaders to stop agitating for cuts in a program that has this feature. Business leaders want people to work! At a minimum, if people are hoping to not work, business leaders are going to want people to save (i.e., loan funds to business leaders) in order to achieve that purpose. Taxing people who are working in order to pay money so that people can enjoy retired life in peace is the antithesis of everything business elites want out of public policy. …We’ve done things to reduce budget deficits, …but we haven’t really acted to make it tougher for people to retire. But [elites] don’t like to say they want to make it hard for people to retire so instead they talk about “the deficit,”
Social Security and Medicare are about the least efficient programs possible. It would be much more efficient for people to just die when they stop working rather than retire. That would be a tremendous boost for GDP/capita and economic efficiency. I sometimes ask my economics students if more retirement would be a good or bad for America and many of them think that more retirement is bad for us because they have internalized mutilitarian ethics of economics.
Words like “efficiency” sound good to young college students, and retirement is far from their immediate concerns. So, to get past the mental walls of jaded youth, I go on to say that it would be even more efficient to eat people when they can no longer work which was the secret of the movie Soylent Green. In a futuristic totalitarian society, unproductive people were ground up into high-protein food called ‘soylent green’ that was extremely popular because quality food was scarce due to overpopulation. That is the logic of mutilitarian economics which worships The Economy using GDP. I often joke about this in class.
Retired people only dilute GDP per capita. Economics could be more ethical if we measured The Economy using median consumption. That would include old people too and more old people would boost the statistic. It is possible that too much retirement could start dragging down median consumption, and then we could start thinking about how desirable that tradeoff is, but it is always much less of a tradeoff than there is between retirement and mutilitarianism. Of course, the elites care more about growing GDP because they control an extra-large portion of GDP. The rest of us should be more concerned about the average American. That is the median. And the median American really, really wants to look forward to a nice, long retirement.